If yu are *really* careful, you can set up guide rails and use a router to route out about 1/8" of the material. I've done this successfully on the curved surface of a skeg to set in bolts 1" deep so I know it can be done, it just takes a steady hand. Practice first, so you feel confident. You'll end up with a rounded cut at the points, so those spots will have to be finished with a sharp chisel, but once you have the bulk of it cut out that will be the easy part.

I'd use epoxy to glue in the inlayed piece as it won't be as likely to stain your surounding wood.

Nice looking design!

Al